My 5 Predictions for 2013

One of the fun things I get to do on this blog is to make predictions about what I think will happen with no accountability whatsoever. lol. I would therefore like to make some predictions about education (and other things).

The fall class of college freshmen will be smaller than it was this year. I don’t think the economy is going to get much better this year because the fundamentals are not sound. The housing crisis is still there, unemployment is still high, Obamacare will cause many companies to reduce hours of part time people/fire people in order to keep their costs under control. Bottom line is I think things are going to keep sucking this year and many other people will think the same way. People take out loans to go to college because of a belief that the investment will pay off. That belief will be shaken even more this year.

Tuition prices will hit a ceiling. There comes a time where you just can’t keep raising prices and expect people to buy your product. As the fall semester numbers start to shape up, colleges will see the problem and some will react by having a sale, thus putting pressure on their peers.

There will be big labor problems between college professors and administrators. If you are short on money, you have to either cut costs or raise prices. Prices will hit a ceiling so you have to look elsewhere. Labor costs are the next big issue and most college classrooms sit empty most of the time. Is it more likely that a university will cut the Second Assistant Provost Dean of Diversity Coordination Administrator, or outsource the English program?

Outsourcing will come to colleges. Outsourcing is defined in this case as not teaching the class with your own faculty. I think we will see teaming up between schools to offer classes online. It allows them to share the costs and they don’t have to have classroom space to house it. Remember, outsourcing is a manifestation of disaggregation which is inevitably coming to colleges. The first trap here though is it weakens the whole college exclusiveness argument. If colleges start to accept credits from their partners, why can’t they accept them from other sources of leaning too? The second trap will be more labor problems from threatened professors.

Massive Open Online Courses (MOOCs) will really explode in popularity this year. I imagine we will see a number of academic studies that bash their efficacy, but I don’t think it will matter. Many people are going to come to a shocking realization: Learning is fun when it’s something you have chosen to do. (especially when it’s free!)

And a bonus prediction:

Apple will be perceived as being out of ideas this year causing its stock to drop a whole lot. I do have to say that Apple did this to themselves. If you keep saying your products are magical, then it becomes hard to top yourself. Right now they are running on the momentum of the Steve Jobs years but that is going to start to slow.

Responses

I think one of the biggest causes of tuition increases has been the decrease in state funding, causing public colleges and universities to transfer much of the expense to students. Ten years ago, states routinely paid for 60% of the costs of 4-year college, and close to 80% of the costs for 2-year colleges. Today, this is close to 25% and 40%.

While I agree that increases are close to reaching a ceiling, I think it’s primarily because states just don’t have as much to cut.

You are completely correct however I want to clarify it a bit more. I’m not just saying the price (tuition) is too high, I’m saying the cost is too high. In other words the student is being passed more of the actual cost. If students had been paying the full price all along, the tuition would not be this high. This always happens when you subsidize things. The problem is, once the subsidy is removed, the price either has to drop to what the market will bear, or the number of students will drop.